NZ urges U.S. to hold firm on farm exports in Pacific trade deal

WASHINGTON, June 19 Thu Jun 19, 2014 10:55am EDT

WASHINGTON, June 19 (Reuters) - New Zealand Prime Minister John Key urged the Obama administration to hold firm on cutting tariffs on farm exports on Thursday as part of a Pacific trade deal and said Japan should be cut out of the talks if it could not make the necessary concessions.

Japan has been reluctant to open up key agricultural markets, such as pork, beef, rice and dairy, and U.S. trade negotiators seem willing to allow the Asian giant to keep some protection for sensitive products, upsetting U.S. farmers.

Key, who is visiting Washington, said it was essential to keep a high standard for the Trans-Pacific Partnership (TPP), which would span 12 nations from Asia to Latin America and cover 40 percent of the world economy.

Trading partners are concerned that if the United States, the biggest country in the pact, gives Japan too much leeway, it could have a domino effect and cause the whole agreement to collapse.

"If ambition comes down in the agricultural sector, then ambition will be lowered in every other sector, and that means intellectual property, that means (state-owned enterprises), that means everything else because there is always going to be a degree of contentiousness about TPP in every country," Key said during a visit to Washington.

"If I was part of the dairy sector in the United States, or if I was part of the broader agricultural sector in the United States, I would be at the president's door telling him: 'Sign up to a comprehensive deal with total elimination of tariffs.'"

Key, whose country is particularly keen to have more access to dairy markets in the United States, Japan and Canada, said all countries had sensitivities but all had signed up to an ambitious, comprehensive deal - including Japan.

"If they can't meet those terms and the other 11 partners can, then we should get on and do a deal with those 11 partners," he said at the a U.S. Chamber of Commerce event, adding that his preference was to keep Japan in. (Reporting by Krista Hughes; Editing by Jonathan Oatis)